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South Carolina: Proposes Creating Personal Medicaid Accounts

August 17, 2005

American Health Line

The AP/Las Vegas Sun on Monday examined South Carolina's proposal to establish personal health accounts for most of the state's 850,000 Medicaid beneficiaries to help encourage them to be more conscious of health care spending. The accounts would be used to purchase private health insurance or pay for care directly, with the amount of money allocated to each account determined by the beneficiary's age, sex and physical condition. South Carolina would limit how much it would spend on beneficiaries, who would have to pay costs above the amount out of pocket or forego care.

South Carolina currently allocates about 19% of its budget to Medicaid, and Robert Kerr, director of the state Health and Human Services Department, said that amount likely will increase to 24% in five years and to 29% in 10 years.

Judith Solomon, a senior fellow at the Center on Budget and Policy Priorities, said state residents would be "priced out of health care."

However, Devon Herrick , a senior fellow at the National Center for Policy Analysis, said the plan promotes personal responsibility. If CMS approves the plan, other states likely will seek similar changes, according to some policy analysts (Freking, AP/Las Vegas Sun, 8/15).

NPR's "Morning Edition" on Wednesday reported on changes to Medicaid programs in Florida, Georgia and South Carolina that aim to reduce costs. The segment included comments from Alan Levine, secretary of the Florida Agency for Health Care Administration and Joan Alker of the Center for Children and Families at the Georgetown University Health Policy Institute (Rovner, "Morning Edition," NPR, 8/17). The complete segment is available online in RealPlayer.